Intoxicating Liquors FAQ 6

Can a licensee surrender his or her license contingent on the license being granted to a particular applicant?

Yes. Although Chapter 125 of the Wisconsin statutes does not address conditional surrenders, they are commonly used where a municipality is at quota for “Class B” licenses and has no licenses, or only reserve “Class B” licenses, available. Conditional surrenders are most frequently used when a business with an existing license is being sold and the seller wants to ensure that the license will go to the buyer and the buyer wants to ensure that he or she will have a license. A liquor license is usually an important part of selling an ongoing business, but only the governing body has the discretion to grant or deny a license to a particular applicant. The owner has no way of guaranteeing that the buyer will get the license, but usually the sale won’t go through if the buyer cannot be assured that he or she will get a license. Therefore, owners commonly surrender their license on the condition that the license be granted to the buyer. If the governing body denies the buyer’s license application (e.g., if the applicant does not meet all of the necessary qualifications), then the surrender of the license does not take place because the condition precedent never occurs. Thus, the licensee retains his or her license.